AdMoolah News and Views

Smart pricing is a constant source of confusion and frustration for AdSense publishers. Although no one except Google know the details of smart pricing, this FAQ attempts to distill the AdSense community’s best guesses at what is going on. I’ll try to keep this post updated with the latest information.

What is Smart Pricing?

Smart pricing is an attempt by Google to ensure that AdWords advertisers are getting a good Return On Investment for their advertising. Usually when an advertiser places an add the y want whoever clicked that ad to take some action such as buy a product or sign up for a newsletter. Google tries to determine if a user from your site is likely to result in the desired action or not. If not, they lower the price of click from your site. Here is an explanation from Google (written from an advertisers point of view):

Google’s smart pricing feature automatically adjusts the cost of a keyword-targeted content click based on its effectiveness compared to a search click. So if our data shows that a click from a content page is less likely to turn into actionable business results — such as online sales, registrations, phone calls, or newsletter signups — we reduce the price you pay for that click

What Factors Effect Smart Pricing?

That’s difficult to say. Google gathers lots and lots of data, and they could be using any of it to determine how much smart pricing to apply. They did say this much: “We take into account many factors such as what keywords or concepts triggered the ad, as well as the type of site on which the ad was served.”

Does Smart Pricing Effect Just One Site or an Entire Account?

It appears that smart pricing effects the whole account. All of the sites on a single account are equally smartpriced. See One Poorly Converting Site Can “Smart Price” an Entire AdSense Account by JenSense for details.

How Do I Know if I Have Been Smart Priced?

There is no way to tell for sure. If you see a sudden drop in the CPC values you get over you entire account, this may indicate you were smart priced. However, a drop in earning doesn’t necessarily mean you been smart priced. Here are some other reasons why your earnings may vary.

Is Smart Pricing Permanent?

No, it’s not. Google readjusts the amount of smart pricing on an account once a week.

How Can I Get Rid of the Effects of Smart Pricing?

The type of traffic you get can effect smart pricing. Try to make sure the traffic on your site is in “buy” mode.

For example, take two different sites about digital cameras. If you have a site about photography tips, people are not really looking to buy cameras. They may be mildly interested in checking out new camera models, so they may click on ads, but they are really not ready to buy. However if you have a site about digital camera reviews, many of the people on the site will be actively looking to buy a camera. When they click an ad, there is a good chance they will be buying. The photography tip site may be smart priced because the traffic just doesn’t convert as well as the review site.

Also keep in mind that accidental clicks will never convert well. If a lot of your click come from visitors click on ads because of some “tricky” placement of ads on your site, you will likely be smart priced.

I Noticed a Drop in My Average CPC. Was I Smart Priced

Not necessarily. There are many reasons why average CPC can drop. Advertisers could be lowering their bids, a major advertiser in you niche may have dropped out of a bidding war, some CPCs vary seasonally, an ad might be displaying on your site that has great CTR but lower CPC than the average in the niche. With so many variances in CPC, it’s hard to tell what is really going on.

Please comment on this entry to let me know what is missing or incorrect.

One of my favorite sessions at PubCon was Viral and WOMM Marketing Management. All the speakers were good, but I found Lawrence Coburn’s talk about web widgets particularly interesting. A widget is a small piece of code that can be placed onto a website that will provide some kind of functionality to the users of a site. Some example of popular widgets is the embedded YouTube player that you see on countless blogs, or StatCounter. For some more examples of widgets see Steve Rubel’s blog post.

One reason web widgets are good for publishers is because they are a great way to build links. The HTML for the widget almost always includes a link back to the site of the widget creator. This can be a very powerful source of links. Statcounter.com, for example, has over 50 million backlinks, according to Yahoo. This is because whenever someone uses a counter widget from StatCounter.com, they get a backlink. StatCounter.com is the number one result for “web tracker”, “hit counter” and “web stats” on Google.

One great piece of advice that Lawrence gave during his talk was rotating the text of the link back to your site. Having identical text in your links doesn’t look very natural to search engines, so rotating the text that is displayed can help with rankings. It also allows you to target different keyword phrases. Another good idea is to provide links to different pages of your site, not just the home page. Again this is something that looks more natural to the search engines.

Web Widget Resources

Lawrence has a blog about widgets called Sexy Widgets.

One interesting service is, MuseStorm, which provides tools for building widgets. However, as far as I can tell, a widget built with MuseStorm do not contain links back to your site. Update: It appears that publishers can have links back to their own sites using MuseStorm.

The FTC had been asked to look into the practice of “buzz marketing” by the anti-advertising group Commercial Alert. In response, the FTC issued a staff opinion (pdf) yesterday that could effect how business is done online. The practice in question is paying a consumer of a product to make claims about that product. While the FTC didn’t think there was any need to add any new guidelines, they feel that word of mouth marketing could not use deceptive practices and each complaint could be handled on a case-by-case basis. Basically, it boils down to people endorsing a product without consumers being told up front that they have been paid to promote the product.

This has some real consequences for doing business on line. Services like PayPerPost, which pay bloggers to write about products without requiring a disclosure, will need to change their practices. Even if an individual blogger writes about a service and includes an affiliate link, I could imagine this could be considered a “deceptive” practice. Jason Calacanis has also recently been looking into claims that some PR firms are paying top Diggers to vote stories up. I could see this falling under this general area as well.

It has always been my policy on this blog that if I have any type of paid review or affiliate link, I will clearly mark it as such. Obviously going forward, this will be a good practice for everyone. Full disclosure has always helped earned the trust of readers, and now it may also keep you out of trouble with the FTC.

I first read about this at CopyBlogger.
Read more: Washington Post Article, Word of Mouth Marketing Association press release

Yahoo has announced that all new advertisers who sign up for a Yahoo Search Marketing account will get access to the new advertising platform, nicknamed Panama. I think this is a big step forward and shows they are pretty confident with their new platform.

On the other hand, I am an existing YSM advertiser, and I still don’t have the new platform. Why would Yahoo show preferential treatment to new advertisers and leave older advertisers out in the cold? Should I be offended?

You may have heard Pixelotto.com, which is set to launch tomorrow. If you haven’t heard, pixelotto is the next scheme from Alex Tew, who created the Million Dollar Homepage. This time he is doing something similar. He is auctioning off a million pixels worth of ads, this time at $2.00 a pixel. The difference this time is that there is a “lotto” attached to the page. Users who click on the ads have a chance of winning 1,000,000 dollars. That’s right, once the whole $2,000,000 worth of pixels is sold, some lucky user will get $1,000,000 of it. He is also giving $100,000 to charity. Leaving himself a tidy $900,000 minus expenses. Not bad, and I think it will work too.

The warning is for people who are considering buying advertising on your site. The traffic that you get from this is going to be pure garbage. People will be click the ads and not caring at all what is on the other side of the link. None of the traffic is going to convert. This will be the equivalent of the garbage traffic that pay-to-surf programs bring. If you are running an ad program like AdSense or YPN, there is a good chance you could get banned from attracting this type of traffic. So, if you do advertise with pixellotto, make sure not to put AdSense or YPN (or any other ad network that cares about quality of traffic) on your landing page.

Digg This!

In webmaster forums people often caution others not to build links too quickly. The search engines do not like unnatural linking patterns and quickly adding links to a site can be a sign of an unnatural pattern. If you go out one day and buy 100,000 links from every page two large websites, that is probably pretty unnatural and the search engines wouldn’t really like it very much. But is building links quickly always a bad thing?

There are ways to build links quickly without being penalized for them. A good example of the is the launch ofReviewMe. ReviewMe has built up a lot of links since their launch less than a month ago. Yahoo now shows 19,502 links to ReviewMe.com. To show that ReviewMe is not in the Google sandbox, I did a search for ‘paid reviews’ on Google, and ReviewMe comes up as the fifth site in the SERPS. So it seems like they manages to build links quickly and properly. How did they manage to do this?

They managed to get very natural looking links by eating their own dog food and paying lots and lots of bloggers to write posts about them. This resulted in links from within the content of pages from a large variety of sites. The strategy seems to work. This is similar to what happens when stories go to the front page of Digg. Many people see the link and link to it from their own blogs and websites.

So, if you are getting links naturally, don’t worry about getting too many too quickly. Google realizes that links do spread quickly on the Internet.

On one of my sites I have been running Google Analytics and have some custom JavaScript installed to allow me to track which visitors click on the ads on my site. On this site I run a combination of AdSense and YPN ads. I have also been running some AdWords and Yahoo Search Marketing campaigns. Here is a chart showing the percentage of visitors who click on ads broken out by the major sources of traffic. Note that this isn’t a page CTR, it is the CTR of a user in the entire visit.

Not surprisingly, people who come to the site by clicking a YSM or AdWords ad have a greater tendency to click ads on the site. What did surprise me was the huge variance between the search engines. People coming from AOL are almost twice as likely to click on ads as people who use Google. MSN users are also as likely to click on ads as AOL users, while Yahoo users were similar to Google users in click behavior. I think this is because AOL andMSN users are not as Web savvy as Yahoo and Google users, and less experienced surfers tend to click more ads then experienced web surfers.

This data is important in running CPC advertising campaigns. I can easily figure out an average Revenue-Per-Visitor (RPV) for my site, but I had no idea how much more valuable visitors from pay per click campaigns were from regular surfers. I can now take into account how much more money I make from visitors from the ad campaigns to adjust my minimum bids. For example, lets say my RPC is $0.10 (it’s not). I also know that AdWords visitors are 20% more likely to click on ads then regular visitors, so I make an average of $0.12 from them. This allows me to bump up my minimum bids a little in AdWords while still being confident I am making money from them.

I’m also thinking that this type of data might be good for fine tuning ad placement. If AOL and MSN users are more likely to click on ads, why not adjust the placement and color of the ads to make them more prominent for these users? Since Google and Yahoo users are a little more ad phobic, it might make sense to make the placement and color of the ads a little more subtle.

Digg This

This is a paid review of PaidQuick.com. (As usual, I only review products or services that are relevant to AdMoolah and that I would probably review anyway.)

ParkQuick.com is a site that offers recommendations and reviews of domain parking services. Domain name parking is used when you have bought a domain, but have not yet actually hosted a web site on it. The domain parking services put ads on the parked domain that will earn you money when people visit the domain.

There are a couple of ways people may visit parked domains. If you buy a domain name that used to have a site on it, but the domain name has expired, there will still be links to the domain, and people may still have the domain bookmarked. If you have not set up hosting at the site yet, they will simply see a “Server Not Found” message when they visit the site. The other way people visit parked domain is called “type in traffic”. This happens when people type the domain name into the address bar of the browser. If you sign up for a domain parking service, these visitors will see ads instead. Depending on the service, you get paid for these ads on a CPC or CPM basis. Usually the payouts are pretty low compared to the payout on real, active sites. Because the payouts are so low, people who use these type of ads usually either have a very large amount of domains (hundreds of them) or have domains that are often typed into the browser address bar.

What PaidQuick does is have a directory of all the various domain parking services that you can sign up for. If you have parked domains, this is probably a pretty good place to start investigating the monetization of these sites.

After a year and a half of writing this blog, I have finally managed to put an about me page up. Better late than never I guess.

There are two sites that launched yesterday that seem to be getting some good results. Both are getting impressive statistics with different viral marketing approaches.

The first is ConquerYouNiche.com (affiliate link), which I mentioned yesterday. This forum allows user to display their own ads. When you post or read the forum you get credits which are exchanged for displaying ads. You also earn ad displays from people you refer. It seems like this idea has really taken off because they already have over 8000 registered users! This was a smart viral marketing plan by the forum owner. This type of incentive would be difficult to reproduce outside of the Internet Marketing world, however, because most people wouldn’t care about being able to display their own ads.

The second one is ReviewMe, which I also wrote about yesterday. They are using a more brute-force approach by paying bloggers to write about them. It seems to be working too, a Technorati search for ReviewMe shows about 140 blogs mentioning them in the last 24 hours. These are links that will be in the middle of highly targeted content. Their Search Engine Ranking should be going through the roof pretty soon.

These numbers are great for a 24 hour period. Viral marketing is great way to get a lot of people to your site quickly if you do it right.